GREAT BRITAIN, II 
249 
will be larger for the country having an excess of imports in 
money value; that is, such a country will be getting a larger 
physical quantity of imports in exchange for a given physical 
quantity of exports than it would get if the money volume of the 
two were equal. This better relation (in physical terms) is of 
course quite different from the relations of the money value of the 
imports and exports; least of all can it be said that the latter (the 
difference in money quantities) serves as a measure or index of 
the rates of physical exchange. But those terms — the whole of 
a country’s physical imports as compared with the whole of its 
exports — constitute the gross barter terms of trade. 
We may proceed now to consider in what way we might measure 
changes in the way these transactions take place; how ascertain 
what modifications may arise in the terms on which a country 
barters its imports for its exports — both the gross and the net 
terms. The terms of course must always be advantageous to some 
extent, otherwise the exchange would not take place at all; but 
they may be more or less advantageous. There is a range of 
greater or less, a possibility of more favorable terms or less favor- 
able terms. The device to which attention is now to be called 
enables us to measure the change, or the direction of change, 
toward a more or a less favorable situation. Let it be premised 
that they in no way indicate whether a country secures a large or 
a small share of the total gains which the international barter 
brings to all concerned — to other countries with which it trades 
as well as to itself — and which are divided between them. They 
only indicate in which direction the accretion of gain is changing ; 
whether the gain, whatever it be in a given year, is less or greater 
in that year than in previous years or in subsequent vears. Itis 
changes, and changes only, both in the net barter terms of trade 
and in the gross barter terms, which we are able to follow. 
The method by which changes in the net barter terms of trade are 
to be discerned was suggested by Professor Bowley as early as 1893.1 
! England's Foreign Trade in the 19th Century, 1st edition (1293) p. 20. See 
also Changes of Prices of Imports and Exports since 1881, Journal of the Royal 
Statistical Society, 1897, Vol. LX, p. 437